How to Improve the Process of Initiating a Wire Transfer to Your Title Company

What qualifies as “good funds” has evolved. However, what hasn’t changed is the need for home buyers to have funds available to complete a purchase. One of the most common ways is via a wire transfer sent to a title company as part of the escrow process. 

Although wire transfers have made the home buying process smoother and more convenient, initiating a wire transfer to a title company could still be streamlined.

How so? First, let’s look at how to complete a wire transfer to a title company, and then examine the tools and techniques that can make the process more secure and efficient. 

The basics of wire transfers to title companies

For home buyers, home sellers, and title companies, the wire transfer process requires several steps and can differ from state to state and bank to bank. However, it generally includes the following steps:

• Home buyers obtain their title company’s information and wiring instructions, including the company’s full name, bank account number, and routing or American Bankers Association (ABA) number.
• Home buyers initiate the wire transfer either online or in person at their bank, specifying how much will be sent.
• The home buyer’s bank reviews the wire request, receives a Federal Reference Number for tracking, and approves it before sending it to the title company.
• The wire transfer is initiated at the requested time to the specified destination.

Once a wire transfer is sent from the initiating bank, it can be very difficult—if not impossible—to stop the process, so ensuring that transferred money is wired to the right place is beyond crucial.

Criminals are targeting the real estate industry

In most cases, despite the amount of money involved, the way that the bank account information is provided to the buyer, seller, and title company often includes phone calls and email exchanges, including the callback verification process.

Unfortunately, criminals are aware of the wire transfer process and these weak links and have begun to take advantage of them to get their hands on real estate wire transfer escrow funds. 

One common technique is through business email compromise (BEC), which helped fraudsters facilitate more than $2.9 billion in losses in 2023.

Streamline and secure wire transfers to title companies

So how can these vulnerabilities in the existing process be mitigated and made more efficient?

One best practice is for title companies to introduce additional security into the process to collect, share, and confirm wire transfer data. Title agents can also digitize the process to allow for end-to-end encryption of these communications channels.

In doing so, title agents introduce new levels of security and reduce the amount of time they spend sharing the right bank account information with the right people at the right time. One of the most secure online practices involves using a real real-time identity platform like CertifID to:

• Move bank account data transfer away from paper-driven processes and emails.
• Require identity verification before collecting and sharing bank account information.
• Encrypt the transfer of data from the source to the title company until closing.
• Insure each wire transfer by up to $1 million.

Once in place, CertifID gives each party to the transaction the peace of mind of knowing that the wire transfer information is being delivered safely and efficiently.‍‍‍‍

Get the latest info about wire fraud prevention

Although cybercriminals are getting more sophisticated and brazen, the tools that title companies and those involved in real estate transactions can use to fight back are evolving too. And, with CertifID, title companies can easily integrate the security and efficiency of the wire transfer data collection process into their existing workflow.
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Ready to learn more about how your business can prevent fraud while finding efficiencies in its escrow deposit wire transfer process? Then check out our white paper, The Wire Fraud Prevention Guide: How Title Companies Can Efficiently and Securely Manage Their Escrow Accounts.

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